Is 30 Year Fixed The Program For The Lowest Downpayment?
My husband and I, both with credit scores of 760, are currently dealing with a mortgage broker to find us a good financing program for 2 properties we are purchasing. We, of course, want the least amount out-of pocket up front and need to keep the monthly cost in line so we have a positive cash flow. Our broker has informed us that there are many programs, however, the one that would require the least amount down, which is 10%, is a 30 year fixed. Of course, with it being over 30 years, the payments are low. I've read posts by people who purchase with no more than 5% down. What kind of program is that? These two semi's, both sides, are in an abosolutely wonderful town, back up to a park and we would imagine we will be holding on to them for good.
Please shed some light on the subject.
Thank you. :-?
I have bought several rental properties with 0% down on 30 year fixed. I recently did one that is at 8%APR so the rate is a little higher then I would pay with 20% down. This loan was through Homecomings Financial.
Good Luck
You have to decide which is more important. Lower rate or less down.
Its not so bad on OO but NOO less down can bump up the rate real quick.
With 10% down it is easy to find good rates.
With 0 down you will have a lot higher rate.
With 5% down you will have a rate in the middle of those. But you have more room on DTI ect.
If you were going to only hold a few years then the higher rate is not a big deal.
But if your going to hold for a long time then you may want to lock in the lowest rate you can while rates are low.
Or perhaps you can invest the money in more deals with returns high enough to make paying a higher rate worth it.
It all depends upon your situation.
That is absurd!!! Just FYI, an ARM is not amortized over the length of the ARM... for example a 5 Year ARM is not amortized over 5 years, it is amortized over 30 years, just fixed for 5 years. I myself am a mortgage broker and I have $0 down programs for every type of borrower in lots of different situations. What state are you in??
That is absurd!!! Just FYI, an ARM is not amortized over the length of the ARM... for example a 5 Year ARM is not amortized over 5 years, it is amortized over 30 years, just fixed for 5 years. I myself am a mortgage broker and I have $0 down programs for every type of borrower in lots of different situations. What state are you in??
If your mortgage brokers any good he should be coming up with all kinds of options for you and explaining the pros and cons. The advantage of working with a broker is that they have access to many different lenders programs..
You could do alot of things, Homecomings does have a 100% non/owner purchase(last time I checked), the rate is decent but the pmi factor is really high so your payment won't be great. You could also look into 80/20's and have the seller pay closing costs and put nothing down, or if you have willing sellers have the seller hold back a second mortgage with a 2 or 5 year balloon, and when you sell or refi pay him off. You could write a book on the different options you have --
I say make your broker earn his commission and and lay out at least 5 different options for you and compare out of pocket cost with your total monthly payment (pitimi) keeping in mind factors such as how long you plan on keeping the property and what your cashflow will be if you plan to rent them out among other things..
Best of luck
*BOARD HUSTLER*[ Edited by JohnLocke on Date 10/08/2004 ]
New Jersey. My broker basically told us that he has many programs, including interest only, but 30 year fixed gives us the least amount down. We are buying both sides of a semi and coming up with 10% on both sides is strapping us somewhat. The pmi is over $100 a month (!) and not sure if it would be higher if we put even less down. I asked several times if there was anything with less downpayment. Again, it seems 10% is the least. I do realize however, that putting less down means more money mortgaged, therefore a higher monthly payment. Would the pmi be higher with even less down?
Thank you ncboater. Wow. I would love to have 700 in closing costs. We intend on holding these properties. Are loan origination fees points? I always thought they were.
Thanks.
Depending on your assets, I do not see why you can not get 100% fiancning in an Atl-A Program.
DianaS,
It's not clear to me if both are investment props or if you will live in one as your primary & the other will be the investment. What state are in (community property or not)?
With 760 scores you should have no problem financing the deals, but rates will depend on use (primary vs investment), price (how much equity is in the deal?) and your income situation (self employed or employees?).
If one will be your primary, 100% financing is doable. Also, I advise my clients (couples) to consider purchasing separately to increase their buying power. I also encourage "A" credit clients to shop for financing on their own unless they specifically ask me to do the loans with the knowledge that I will charge a fee for my services (within the confines of the law of course). With those scores banks will work with you unless you have some special circumstance that warrants a mortgage broker. Do ou feel you need more education as it pertains to financing?